State Bank of India, Punjab National Bank, Canara Bank and Bank of India are among the large state-run banks
New Delhi : The government is looking at consolidation among the 27 state-owned banks to create 4-5 large sized lenders, a process that will begin with the merger of State Bank of India and its five associates and Bharatiya Mahila Bank with itself. It is also looking at its stake in IDBI Bank coming down from 80 per cent to 60 per cent if stake dilution happens via QIP, a finance ministry official told PTI.
“What we are looking at is around four to five big banks after all the mergers not more than that, but that is not currently on the radar. It won’t happen any time soon,” the official added.
“All trade unions have to be taken on board and there are other issues also before we even begin. Right now we are only hoping to get SBI merger done,” the official said, adding that the merger of associate banks with SBI is likely to happen before the current financial year ends in March.
State Bank of India, Punjab National Bank, Canara Bank and Bank of India are among the large state-owned banks in the country. In his Budget speech, Finance Minister Arun Jaitley had announced that the government will unveil a roadmap for consolidation of public sector banks (PSBs) which are expected to get an infusion of Rs 25,000 crore this fiscal.
The government has announced a revamp plan ‘Indradhanush’ to infuse Rs 70,000 crore in state-owned banks over four years, while they will have to raise a further Rs 1.1 lakh crore from markets to meet their capital requirements in line with global risk norms Basel-III.
In line with the blueprint, PSU banks were given Rs 25,000 crore in the last fiscal and an equal amount is planned for the current fiscal. As per the plan, Rs 10,000 crore each would be infused in 2017-18 and 2018-19. Government has also said that more funds will be provided to PSBs if needed.
